4 ms·

Because compensation should be proportional to investment and both the 1X and 10X programmers invest the same thing, eight hours of their time each working day.

Because compensation should be proportional to investment and both the 1X and 10X programmers invest the same thing, eight hours of their time each working day. In practice things are more complicated as this creates undesirable incentives but I think the general point stands.

coffeeblack 4y ago
You go ahead and do that, pay your employees based on the hours they are “there“. Your competitor pays its employees based on each employee’s results. Then let’s see which company survives in the market.
- NineStarPoint 4y ago
  It’s complicated to know, because identifying which of your employees is providing the results is a hard problem. In practice it often devolves into people spending at least as much time marketing themselves to management as they do actually being productive, and optimizes for people who are good at that marketing being in high positions instead of people who are most productive. The larger the company the more pronounced this issue is, which is why so many large companies aren’t kicked out of the market despite their lack of ability/willingness to pay according to results.
  - coffeeblack 4y ago
    That doesn’t matter either. If you have an average employee who complains a lot and he may leave, but that would be a hassle for you, then it makes sense to pay him a bit more so he shuts up and you don’t have to look for a new person. Otoh, if your underpaid star developer sits quietly in his corner and all you have to do is to pat him on the back once in a while to keep him happy, why would you pay him more?
- danbruc 4y ago
  That is why I mentioned incentives. To make it more precise, assuming everyone works to the best of their abilities, people should be compensated in proportion to the time they work, not the output of their work.
  - helge9210 4y ago
    > should be compensated in proportion to the time This assumption doesn't always hold. Employee and employer might agree to share the value created which is not always a function of time spent working.
    - danbruc 4y ago
      Can you give an example? I don't think this is impossible, but I can not immediately think of an example. And this probably heavily depends on what you mean with value created.
      - helge9210 4y ago
        Example of compensation not tied to a time spent: a company might pay someone to do nothing, so this someone doesn't do something for a competitor. Value sharing is a basic framework for compensation negotiation. Employee wants to get all the value derived from own contribution. Employer wants to pay absolute minimum employee is willing to accept. Paying more than derived value doesn't make economic sense, so compromise will be somewhere within this range. If acceptable minimum is below the derived value, compromise is impossible. Time spent working is a free variable in all this.
- greysphere 4y ago
  I mean, the market clearly favors the former...
Kinrany 4y ago
The value of the hours they invest is different.
- danbruc 4y ago
  Not to the developers.
mhaberl 4y ago
> Because compensation should be proportional to investment and both the 1X and 10X programmers invest the same thing, eight hours of their time each working day So you "should" pay for example Rob Pike or Ken Thompson equal to what you would pay some junior dev because they invest eight hours of their time each working day?
- danbruc 4y ago
  Yes. To a first approximation, ignoring a gigantic pile of complications due to incentives. And the person cleaning the office should get the same pay as well.
  - helge9210 4y ago
    USSR was exactly like this.
    - NoraCodes 4y ago
      USSR also had warm hats and abundant housing. Should we reject those, too, because they are historically associated with communism?
      - helge9210 4y ago
        > and abundant housing Not relevant to the topic, but this one is not true.
  - brigandish 4y ago
    Since we're talking about investments, did the person cleaning the office invest the time to become adept at programming? Unlikely. The cost of an item is often linked to how much was invested (because that is linked to how much it took to come to fruition, and therefore, how much it needs to sell at to recoup that investment). It's not only the 8 hours that is invested, it's the previous investment that needs to be recouped. That's one reason behind why different people cost different things, which is ultimately down to quality. We're back to the initial question but at least we've dispensed with communism in the meantime.

coffeeblack 4y ago

You go ahead and do that, pay your employees based on the hours they are “there“. Your competitor pays its employees based on each employee’s results. Then let’s see which company survives in the market.

NineStarPoint 4y ago
It’s complicated to know, because identifying which of your employees is providing the results is a hard problem. In practice it often devolves into people spending at least as much time marketing themselves to management as they do actually being productive, and optimizes for people who are good at that marketing being in high positions instead of people who are most productive. The larger the company the more pronounced this issue is, which is why so many large companies aren’t kicked out of the market despite their lack of ability/willingness to pay according to results.
- coffeeblack 4y ago
  That doesn’t matter either. If you have an average employee who complains a lot and he may leave, but that would be a hassle for you, then it makes sense to pay him a bit more so he shuts up and you don’t have to look for a new person. Otoh, if your underpaid star developer sits quietly in his corner and all you have to do is to pat him on the back once in a while to keep him happy, why would you pay him more?
danbruc 4y ago
That is why I mentioned incentives. To make it more precise, assuming everyone works to the best of their abilities, people should be compensated in proportion to the time they work, not the output of their work.
- helge9210 4y ago
  > should be compensated in proportion to the time This assumption doesn't always hold. Employee and employer might agree to share the value created which is not always a function of time spent working.
  - danbruc 4y ago
    Can you give an example? I don't think this is impossible, but I can not immediately think of an example. And this probably heavily depends on what you mean with value created.
    - helge9210 4y ago
      Example of compensation not tied to a time spent: a company might pay someone to do nothing, so this someone doesn't do something for a competitor. Value sharing is a basic framework for compensation negotiation. Employee wants to get all the value derived from own contribution. Employer wants to pay absolute minimum employee is willing to accept. Paying more than derived value doesn't make economic sense, so compromise will be somewhere within this range. If acceptable minimum is below the derived value, compromise is impossible. Time spent working is a free variable in all this.
greysphere 4y ago
I mean, the market clearly favors the former...

Kinrany 4y ago

The value of the hours they invest is different.

danbruc 4y ago
Not to the developers.

mhaberl 4y ago

> Because compensation should be proportional to investment and both the 1X and 10X programmers invest the same thing, eight hours of their time each working day So you "should" pay for example Rob Pike or Ken Thompson equal to what you would pay some junior dev because they invest eight hours of their time each working day?

danbruc 4y ago
Yes. To a first approximation, ignoring a gigantic pile of complications due to incentives. And the person cleaning the office should get the same pay as well.
- helge9210 4y ago
  USSR was exactly like this.
  - NoraCodes 4y ago
    USSR also had warm hats and abundant housing. Should we reject those, too, because they are historically associated with communism?
    - helge9210 4y ago
      > and abundant housing Not relevant to the topic, but this one is not true.
- brigandish 4y ago
  Since we're talking about investments, did the person cleaning the office invest the time to become adept at programming? Unlikely. The cost of an item is often linked to how much was invested (because that is linked to how much it took to come to fruition, and therefore, how much it needs to sell at to recoup that investment). It's not only the 8 hours that is invested, it's the previous investment that needs to be recouped. That's one reason behind why different people cost different things, which is ultimately down to quality. We're back to the initial question but at least we've dispensed with communism in the meantime.